Fueling Strategy: Please fill as needed tonight, Be Safe Today
NYMEX Crude $ 46.02 DN $.5200
NY Harbor ULSD $1.4995 DN $.0155
NYMEX Gasoline $1.5567 DN $.0038
NEWS
Oil prices finished with a loss on Monday, their first in six sessions, as expectations for a monthly rise in U.S. shale-oil production helped to push prices back in the wake of a more than 5% climb last week.
August West Texas Intermediate crude shed 52 cents, or 1.1%, to settle at $46.02 a barrel on the New York Mercantile Exchange, after trading as high as $46.88 during the session. It had scored a gain of 5.2% last week. September Brent crude on London’s ICE Futures exchange lost 49 cents, or 1%, to $48.42 a barrel.
In a monthly report released Monday, shortly before WTI prices settled, the U.S.Energy Information Administration said it sees a rise of 113,000 barrels a day to 5.585 million barrels a day in August oil production from seven major domestic shale plays, compared with July, with the Permian Basin expected to see the largest output climb. The data followed a separate monthly short-term outlook report from the EIA, which forecast a growth slowdown in U.S. output next year because of lower oil prices.
“Inventory levels and any headlines that provide some supply or demand guidance will be the main drivers in the near term,” Brian Youngberg, senior energy analyst at Edward Jones, told MarketWatch, ahead of Monday’s EIA report.
“We still see oil higher at the end of the year, with shale output growth offset by rising global demand and output levels elsewhere remaining challenging as a whole,” he said.
Phil Flynn, senior market analyst at Price Futures Group, meanwhile, pointed out “U.S. crude supply is falling at a record pace and the draw downs in supply do not look like it will stop anytime soon.”
The EIA has reported hefty declines in domestic crude supplies in each of the last two weeks and last week, Baker Hughes reported a modest increase in the number of active U.S. oil-drilling rigs.
Elsewhere, on Monday, China said its domestic daily crude production averaged some 4 million barrels a day in the first half of 2017, down 5.1% from a year earlier. That as imports rose 14% to an average 8.5 million, cementing China’s position as the world’s leading energy importer, and the country’s economy growing a stronger-than-expected 6.9% in the second quarter. Analysts say as long as oil prices stay relatively low, Chinese refineries would continue to buy in efforts to shore up its inventories. China’s growing oil demand is one of the most-important pillars to support the crude market as a global glut persists, market participants said.
An increase in projected oil demand from the International Energy Agency helped to fuel oil gains last week. “We can see there are some encouraging changes,” said Ric Spooner at CMC Markets. He said around 65% of that firm’s clients are keeping a long view on the oil market, though many are still taking a wait-and-see position. “Price is the swing factor here,” added Spooner. “At $40, we will see more U.S. shale producers step on the brake, but they will step on the gas pedal once prices edge closer to $50.”
Have a great day,
Loren R. Bailey, Founder & Owner
FUEL MANAGER SERVICES INC
“Serving the Trucking Industry Since 1992”